CIVIL PROCEDURE CLASS 25

Professor FischerColumbus School of LawThe Catholic University of AmericaNovember 15, 2001

ANNOUNCEMENTS

Academic Dean’s Office Exam Skills Workshop (Alvare, Schooner, Harmon) 5:30 Friday November 16 in the AuditoriumIPLSA (Intellectual Property Law Students Association Meeting to be rescheduled

WRAP-UP OF LAST CLASS

We finished our study of issue preclusion by learning about non-mutual collateral estoppel We commenced the unit on jurisdiction by studying federal question jurisdiction preclusion

WHAT WILL WE DO TODAY?

Continue with our study of subject matter jurisdiction by learning about diversity jurisdiction, supplemental jurisdiction, and removal

DIVERSITY JURISDICTION

U.S. Constitution Article III section 2 states: “The judicial Power [of the United States] shall extend to . . . Controversies between Citizens of different States . . . and between a State, or the Citizens thereof and foreign States, Citizens, or Subjects.”

RATIONALE FOR DIVERSITY

Why did the framers include the provision for diversity jurisdiction in the Constitution?Do you think diversity jurisdiction is necessary or desirable, or should it be abolished?

Congressional Implementation

Congress first implemented the Constitutional grant of diversity jurisdiction in the 1789 Judiciary ActPlease cite to the current statutory grant of diversity jurisdictionIs this grant narrower or broader than the grant of diversity jurisdiction in Article III sect. 2 of the U.S. Constitution?

Restrictions on Diversity Jurisdiction

1. AMOUNT IN CONTROVERSY (St. Paul Mercury Indemnity Co. v. Red Cab Co. (1938)2. COMPLETE DIVERSITY (Strawbridge v. Curtis (1806)RULE OF THUMB: If any 2 parties on both sides of the v. are citizens of the same state, that defeats diversity jurisdiction

Requirements for Diversity

1. CITIZENSHIP (see 1332(a)2. AMOUNT IN CONTROVERSY 3. COMPLETE DIVERSITY

Timing For Determining Diversity

To determine diversity, should the court consider the citizenship (1) at the time of filing the complaint ; (2) at the time of serving the complaint; (3) at the time of filing the answer; (4) at the time of serving the answer; or (5) some other time?

CITIZENSHIP REQUIREMENT

BE FAMILIAR WITH 1332(a)How is citizenship of a natural person determined?How can citizenship be changed?A particular problem: determining the citizenship of students attending school in a different state from their parents’ domicile

CITIZENSHIP OF CORPORATIONS

How do you determine the citizenship of a corporation for the purposes of diversity jurisdiction?What statutory provision governs a corporation’s citizenship for this purpose?

CORPORATE CITIZENSHIP

For the purposes of diversity, a corporation may have 2 citizenships unlike a natural person who can only have 11. Place of incorporation2. Principal place of business How is the principal place of business determined?

TESTS USED TO DETERMINE CORPORATE CITIZENSHIP

2 main tests used to determine “principal place of business” (corporation can only have one!)1. NERVE CENTER TEST - where is corporate policy made, where are executive/administrative functions of corporation?2. PLACE OF OPERATIONS TEST -where is corporation’s major production/service activities?

ALIENAGE JURISDICTIONCan a person domiciled in a state and a citizen of the U.S. invoke alienage jurisdiction to sue a resident of that state who is not a citizen of the U.S. without any other basis for subject-matter jurisdiction?See 28 U.S.C. s. 1332 (a) (2)Note technical difference between “alienage” jurisdiction and “diversity” jurisdictionNOTE: Alien corporations are citizens of foreign nation where incorporated.

ALIENAGE HYPONigel is a British subject living in Michigan.Can Roseanne, an American citizen domiciled in Michigan, sue Nigel, a British subject who has lived in Detroit for the past 6 months, in federal court for breach of contract?Does it matter if Nigel has been admitted to permanent residence in the U.S.?

Americans Domiciled Abroad

Pierre is an American citizen domiciled in Paris. Can Jonathan, an American citizen domiciled in New York, invoke alienage or diversity jurisdiction to sue Pierre in federal court?Can Jonathan rely on alienage or diversity jurisdiction to sue Pierre’s friend

Marie-Louise, a French national domiciled in Paris in federal court?

Amount In Controversy Requirement

What is the amount in controversy requirement for diversity?

Amount In Controversy Requirement

Matter in controversy must exceed $75,000Under St Paul Mercury, it must appear to a legal certainty that the P’s claim really is for less than the jurisdictional amount to justify dismissal. It must be patent on the face of the complaint that the P can’t recover the jurisdictional amount. What happens if a judgment is eventually entered for $75,000 or less than $75,000? Is there still diversity? Can the judge penalize the P in any way?

Traditional Aggregation RulesCAVEAT: traditional rules may be superceded to some extent by supplemental jurisdiction statute1. P with multiple claims against the same D: e.g. Ringo sues Paul for $70,000 in federal court for personal injuries suffered in a motorcycle crash. Assume Ringo and Paul are citizens of different states.A. Can Ringo bring a claim in the same action for damage to the cycle for $15,000? B. Assume Ringo can join the claim. Is the amount in controversy requirement met? C. What if rather than suing for damage to to bike, Ringo sues Paul for $10,000 for an unrelated breach of contract?

TRADITIONAL AGGREGATION RULES CONT’D

Multiple Ps sue the same D for different claims: e.g. Dorothy – ME (passenger) sues George- TX (driver) in federal court for $45,000 for damages suffered in a car crash. A. Is there subject matter jurisdiction? What if Laura- TX, also a passenger in George’s car, wants to join as a plaintiff to sue George for $35,000 for her injuries arising from the same accident?B. Will the supplemental jurisdiction statute change the result?

TRADITIONAL AGGREGATION RULES CONT’D

Would it make any difference to your answers in the previous hypothetical if Dorothy’s claim was for $90,000?

HYPOBarbie (CA) and Ken (CA) are equal partners in a dressmaking business called “High Heels”. Skipper (N.Y.) orders 4 ball gowns from them. Barbie and Ken make the gowns and deliver them to Skipper along with an invoice for $90,000. After 18 months, Skipper has not paid Barbie and Ken a cent.

HYPO CONTINUED

Barbie and Ken’s lawyer, Dawn, files an action in federal court, naming High Heels as plaintiff and claiming the amount of the $90,000 debt in damages. Barbie and Ken, as equal partners, each have an interest of $45,000 in the claim. Does the court have subject matter jurisdiction?

TRADITIONAL RULES FOR AGGREGATION

Single P w/2 or more claims vs. single D2 Ps with claims against a single D - “separate and distinct”/”common & undivided interest” testSingle P w/ claims vs. multiple DsCounterclaims

SUPPLEMENTAL JURISDICTION

Beyond federal question and diversity/alienage jurisdiction, this doctrine expands the subject-matter jurisdiction of federal courts to claims over which there is no independent basis for subject matter jurisdiction

Originally a judicially-created doctrineCodified in 1991. What is the current supplemental jurisdiction statute?

Originally 3 kinds of supplemental jurisdiction

Pendant claim jurisdiction e.g. P sues non-diverse D for copyright infringement and also wants to sue for state law claim against same defendantPendant party jurisdiction As above, but second state law claim against different DAncillary jurisdiction – Related claims asserted by D as counterclaim or other additional parties after initial complaint

United Mine Workers v. Gibbs (1966)

Leading case on pendant claim jurisdictionState the plaintiff’s causes of action, indicating whether each is a federal or state law claimWhat is the procedural history?What is the issue for the U.S. Supreme Court to decide?How did the Supreme Court rule on this issue?

United Mine Workers v. Gibbs

Rationale in Gibbs

According to Justice Brennan, what is the Constitutional source for exercising jurisdiction over pendant state claimsWhen does a federal court have power to exercise pendant jurisdiction? Must that power be exercised in every case where it exists?What is the policy justification for pendant claim jurisdiction?

U.S. Constitution Article III section 2

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;--Operative word is “Cases”

2 step test in Gibbs

1. Does the court have jurisdictional POWER to entertain the pendant claim? Hint: look at relationship between claims2. If the court has that power, does the exercise of sound DISCRETION indicate that the federal court ought to assert that discretion? What factors must the court take into account?

Federal Claim is dismissed before trial

According to Gibbs, how should dismissal before trial of the federal claim affect the issue of whether or not to refuse jurisdiction over the state law claim?

OUTCOME of Gibbs

Did Gibbs succeed on the merits on the state law claim?

Pendant Party JurisdictionSupreme Court rejects extending Gibbs doctrine to pendant party jurisdiction in Aldinger v. Howard (1976)Left open one possibility that pendant party jurisdiction OK where claim with independent jurisdictional basis was one where statute provided for independent claim based on exclusive subject matter jurisdictionFinley v. United States (1989) rejected pendant party jurisdiction in that circumstance

Ancillary Jurisdiction

Diversity supplemental jurisdictionCounterclaims, cross-claims, third party complaintsOwen Equipment v. Kroger (1978) : Supreme Court upheld limitation on diversity supplemental jurisdiction over claim by P against impleaded third party D where P could not have sued that person originally in federal court because diversity was lacking

Owen Equipment v. Kroger (1978)

28 U.S.C. sect. 1367

Codifies pendant claim, pendant party (in direct response to Scalia’s invitation in Finley case that Congress could change the scope of pendant party jurisdiction), and ancillary jurisdictionNow all types of jurisdiction are known as “supplemental jurisdiction”

28 U.S.C. sect. 1367(a)

In what circumstances does s. 1367(a) give district courts POWER to exercise supplemental jurisdiction over pendant claims or parties?What are the exceptions to 1367(a)Where do you find these exceptions?

28 U.S.C. sect. 1367(b)

What is the limitation on subject matter jurisdiction provided for in 28 U.S.C. s. 1367(b)?Why was this limitation incorporated into the supplemental jurisdiction statute?

28 U.S.C. sect. 1367(c)

Can courts decline to exercise supplemental jurisdiction, even where they have to power to exercise such jurisdiction?If so, in what circumstances?

28 U.S.C. sect. 1367(d)

This is a tolling provisionWhat is its effect? What is the reason for this tolling provision?

Does sect. 1367 overrule traditional aggregation rules?

NO: See Zahn v. International Paper Co., 414 U.S. 291 (1973) - pre-sect. 1367 YES: See Free v. Abbott Laboratories (5th Cir. 1995, affirmed by an equally divided Supreme Court (2000) - holds that the supplemental jurisdiction statute overrules Zahn

PRACTICE EXERCISE 31

CB p. 839Plaintiff: Nancy Carpenter (NH)Ds: Dee (MA), Ultimate (MA)3d Party Ds: McGills Garage (MA), Dale McGill (NH)Motion to dismiss for lack of subject-matter jurisdictionMotion to sever impleader

REMOVAL

What is removal?What is the policy justification for removala. For diversity cases?b. For federal question cases?

LEGAL SOURCES FOR REMOVAL PROCEDURE

NOT IN U.S. CONSTITUTIONSo, removal is purely statutory.There have been federal removal statutes since 1789.

What is the current general removal statute?

LIMITS ON REMOVAL

Can a plaintiff remove? Can a plaintiff remove if there is a counterclaim?Can a case be removed from state to federal court?Any types of actions non-removable? Please see 28 U.S.C. sect. 1445

WHEN IS A CASE REMOVABLE?

There must be original subject-matter jurisdiction in federal courtBasic rules of federal question and diversity/alienage applyWell-pleaded complaint rule appliesArtful pleading rule

WHAT IF FEDERAL COURT HAS EXCLUSIVE JURISDICTION?

P brings action in state courtCan D remove?See 28 U.S.C. section 1441(e)

REMOVABLE CLAIM JOINED WITH NON-REMOVABLE CLAIM

What is the effect of 28 U.S.C. 1441 ( c)?“separate and independent” test

PROCEDURE FOR REMOVAL

How does a defendant remove ? (see 28 U.S.C. section 1446)Can a defendant waive her right to remove?How many defendants must agree to remove a case?

NOTICE OF REMOVAL

What must be in a notice of removal?Filing requirementsNotice requirements

WHERE IS CASE REMOVED TO?

What state court(s) may hear a claim that is removed from federal court?What is the applicable statutory provision determining this?

CHALLENGING REMOVAL

How does a plaintiff challenge removal?Can a plaintiff waive her right to challenge removal?Are there any applicable time limits? If so what?

PROCEDURE AFTER REMOVAL

What happens after removal?

Burnett v. Birmingham Board of Education (N.D. Ala. 1994)

What is Ps cause(s) of action? Federal or state?What is the procedural issue for the court to decide on the motion at issue?What are the grounds for the motion?How does the court rule on the motion?What is the court’s reasoning?